Hello,

I started working for a company in California from nov15th -2004 . I worked 3 months on OPT and from feb-15th I am working on H1.while on OPT , I paid federal tax of around $900 every month for 3 months .

Do we have to pay federal tax while on OPT ? In case , if we don't have to how can I get my money back that I paid as federal tax for those three months ?

Please let me know your advice on this.

Thanks,
Balaji.

Balaji:

I assume you were on a F-1 visa when you initially started your OPT.

The answer is yes, you must file federal (and state) income taxes for money you earned while on OPT, whether you were on a F-1 or H-1 visa. The only issue is whether to file as a resident alien (filing normal tax forms) or as a non-resident alien (filing Form 1040NR or Form 1040NR-EZ). Based on what you told me, you should file Form 1040NR or Form 1040NR-EZ for 2004.

You are probably exempt from Social Security and Medicare taxes for 2004. If these taxes were withheld, you should file Form 843 requesting a refund. Download IRS Pub 519 for instructions on how to file this form.

Thank you very much for your reply.
Can you please tell me whether I would be able to get the federal tax(that I paid while I am on OPT) as refund when I will file the tax for 2005 .

That depends on how much you made and what deductions and exemptions you can claim.

Hello,
I am working on OPT and Social Security Tax is being withheld for me right now. You mentioned in the thread that you can be exempt from Social Security and Medicare Tax if you are non-resident for tax purposes.
I am in the United States since 2002. But I initially came here on J2 and then changed by visa status to F1 the following year. So Since both J and F visas have the 5 year exemption to be counted as a resident, am I still considered a non-resident for tax purposes?
I am married and my husband is on H1-B, is that a factor for determining my tax residency status (considering I want to file as- married filing seperately).
Will appreciate clarification on this matter.

Thanks,
Swetha

Hi Swetha,

If you are working on OPT , you are exempt from social security and medicare taxes , but as your husband is on H1 , your case might be different . I am not an expert in this tax issues , so lets hope that someone with profound knowledge on this will answer your question.


Thanks,
Balaji.

Swetha:

If you file jointly with your husband, you must file as a resident alien, which means you are liable to pay Social Security and Medicare taxes.

If you file apart (note that I did not say Married Filing Separately), you will file Form 1040NR or Form 1040NR-EZ as a non-resident alien. In this case, you would be exempt from Social Security and Medicare taxes.

You must first ask your employer to refund these taxes to you. If they refuse, get it in writing and attach to to the Form 843 that you need to file to claim a refund for the Social Security and Medicare taxes withheld. See IRS Pub 519, Chapter 6 for details.

Hello

I have few issues to get clear picture on

First one:
How much tax(in terms of %) will be withheld while on OPT.

Second one:
Earlier 'AtlantaTaxExpert' was mentioning that, people are exempt from social security(which I am not worried about) and medicare(more clarification plz) while working on OPT. does this mean, no need to pay for health insurance until h1b starts and will still have all health insurance benefits.

Many thanks in advance.

Anil

Federal income taxes will be withheld from the paycheck of an F-1 student during OPT. Medicare and Social Security taxes should not be paid by F-1 OPT students if you are still a non-resident alien for tax purposed. If you are not sure what your IRS status is, please check www.irs.gov. If there is confusion concerning taxes, the employer can be directed to IRS Publication 519 at (www.irs.gov).

You DO know that you are answering a post that is over SEVEN years old, right?